Germany's second biggest bank is taking advice from Goldman Sachs as it prepares for takeover bids

Both Goldman Sachs and Rothschild are advising the lender, which has a market capitalisation of €14 billion.

Any deal for Commerzbank would be the biggest for a German bank since before the financial crisis.

LONDON — Commerzbank, Germany's second-largest bank by assets, has hired Goldman Sachs as an adviser as it prepares for takeover bids, according to reports.

The Financial Times reports that Goldman and investment bank Rothschild have been hired by the Frankfurt-headquartered Commerzbank to prepare for numerous possible merger scenarios. They are "not strictly preparing a defence strategy against a takeover bid," according to the report.

M&A in the financial services sector in Europe has been subdued since the financial crisis, and any deal for Commerzbank — which has a market capitalisation of around €14 billion (£12.5 billion; $16.5 billion) and total assets worth around $506 billion (€430 billion; £384 billion) — would represent the biggest banking deal in Germany in more than 10 years.

Banks around Europe — including Italy's biggest bank, UniCredit, and French giants BNP Paribas and Credit Agricole — are thought to be among potential bidders for the bank, which deals with a substantial chunk of banking business for Germany's so-called "Mittelstand."

The Mittelstand is the collective name given to small and medium-sized businesses in Germany, which form the backbone of the country's economy.

Any potential takeover may be complicated by the fact that Commerzbank is still part-owned by the German government, and any deal would, therefore, need government approval.